Taking a drink may take more out of your wallet

DENVER - Coloradans may be asked this fall whether they're willing to pay 14 cents more on a $7 six-pack or 40 cents more on a $20 bottle of wine in order to provide health care for uninsured kids.

House Bill 1341 would ask voters to approve a 2 percent sales tax increase on all alcohol purchases with the money going to the Colorado's Children's Basic Health Plan (CHiP). Of the roughly 800,000 Coloradans who do not have health insurance, it is estimated 180,000 are children.

"This is really important for Colorado," said Rep. Jerry Frangas (D-Denver), the sponsor of the measure. "We need to do this and I think this is a good place to do it. It's a luxury tax. It's a very small amount, only 11 cents on a six-pack of Budweiser and I think we can all live with that."

Frangas says the measure could raise $57 million from Coloradans in its first year alone. Combined with matching funds from the federal government, Frangas believes the total raised could top $150 million.

Critics wonder whether a tax increase should be the answer to all problems in Colorado.

"It seems the common prescription around here for health care reform is nothing more than a tax increase," said Rep. Cory Gardner (R-Yuma). "The question is what can we do right now, today, within existing policies, within existing funds, to solve our health care woes? We've been told over and over there is no silver bullet for health care reform and now, we're going to tax the Silver Bullet."

Gov. Bill Ritter (D-Colorado) announced his "building blocks to health care reform" earlier this month which called for an increase in funds to cover uninsured kids, but he said at a news conference addressing the plan that he was not inclined to see a health care reform measure in front of voters this fall.

According to the Tax Foundation, a non-profit educational foundation based in Washington, D.C., Colorado currently has the lowest state sales tax (2.9 percent) of any state in the country with a statewide sales tax. There are five states which do not have a sales tax. If the 2 percent increase were to pass, Colorado's 4.9 percent sales tax rate would be the 16th lowest in the country.

The measure is set to get its first public hearing within the next couple weeks. It would need a simple majority in the State House and State Senate in order to be placed before voters in November.